Beijing: Australia has been called on by Canada to help “save the WTO”, with the Morrison government preparing to attend a meeting next week that deliberately excludes trade war combatants the United States and China.
In a sign of the political sensitivity of moves to reform the World Trade Organisation, which Donald Trump has threatened to quit, Trade Minister Simon Birmingham is exected to represent Australia at the Ottawa Ministerial on WTO Reform on October 25.
A discussion paper circulated ahead of the Ottawa meeting implicitly criticises the US for blocking the appointment of new judges to the WTO, which “threatens to bring the whole dispute settlement system to a halt”. By December, there will only be one judge left.
Canada is pushing to strengthen dispute resolution and modernise the WTO, and has invited Australia, New Zealand, Japan, Singapore, South Korea, Mexico, Switzerland and the European Union, among others, to the meeting, which has been dubbed the “save the WTO summit”.
But the US is pushing its own WTO reform proposal – and has sought backing from Japan and the EU – to stop China claiming special treatment as a “developing” nation, and to impose restrictions on the country’s state-owned enterprises.
Mr Birmingham said: “New rules on market-distorting state-owned enterprises are being suggested by a number of WTO members. We are engaging on this issue, just as we are with the full suite of other reform suggestions, including on dispute settlement and enhancing transparency in the WTO.”
China says it supports WTO reform, and officials are believed to be working on a proposal with New Zealand. But it will resist US moves to penalise its state-owned companies.
Canada, like Australia, is a Five Eyes intelligence partner, but has closer trade links to the US. Yet the Trudeau government has recently been vocal in its resistance to Washington’s pressure for US allies to distance themselves from China.
Trudeau said this week he wouldn’t let “politics slip into” Canada’s decision on whether it will allow Chinese company Huawei to participate in Canada’s 5G network. His comments came after US Senator Marco Rubio sent Trudeau a letter, cc’d to FBI director Christopher Wray, and then publicly leaked, urging Canada to ban Huawei from 5G.
Trudeau also revealed Washington had tried and failed to put conditions into its trade agreement with Canada and Mexico that were “very, very rigid on China”.
Trudeau said on Monday that Canada would continue trade talks with the world’s second-largest economy. This is despite a so-called “poison pill” in the new North American Free Trade Agreement that seeks to ban deals with non-market economies.
Lowy Institute senior fellow Richard McGregor said: “After the bruising renegotiation of NAFTA, Trudeau may be in no mood to listen to the US.”
Canada’s minister for international trade and diversification, Jim Carr, has said next week’s summit of 13 “like-minded” countries will seek to find a way to persuade the US of the WTO’s usefulness.
The Trump government’s $US250 billion in punitive tariffs on Chinese goods, and Beijing’s retaliatory $US110 billion in tariffs violate the WTO rules.
Countries including Australia are fearful that the global trading system will unravel, to the detriment of small and medium-sized nations.
Mr Birmingham said: “Australia’s focus is to pursue practical reforms to the WTO that ensure continued international confidence in the WTO”.
Modernisation of the WTO should also cover e-commerce, he said.
Mr Birmingham will visit the US after Canada, and hopes to travel to China in the first week of November.
The US and China are both courting the EU’s support for WTO reform, but US trade talks with the EU appeared to fray again on Wednesday.